U.S. grants quota leeway for Indonesian textiles

U.S. grants quota leeway for Indonesian textiles

JAKARTA (JP): The United States has agreed to give more leeway
for Indonesia's exports of textiles and textile related products
to that country.

Director general for International Trade from the Ministry of
Industry and Trade, Anang Fuad Rivai, told journalists the United
States' decision was reached in a three-day bilateral
consultation early this month.

"As a result of the consultation, the United States agreed not
to apply Indonesia's quotas on textiles imported from other
countries, even though the raw materials were actually being
produced in Indonesia," Anang said.

Since July 1, 1996, the United States has enforced a new set
of rules of origin for the import of a wide range of products,
from T-shirts to pants.

Earlier, the origin of a product was determined on the basis
of where substantial transformation of the product had taken
place, generally meaning where the cloth used in the product was
cut.

However, from July 1, the new rules confer origin to the
country where the product is produced or assembled.

Consequently, the United States' imports of textile products
from any countries which use Indonesia's grey fabrics are subject
to Indonesia's quota.

Anang, who was accompanied by PT Texmaco's President M.
Manimaren, called on Indonesia's textile producers and exporters
to use the opportunity to increase their exports to the United
States.

He also called on local textile printing industries to improve
their production capacities to absorb more locally produced grey
fabrics, most of which are currently exported to various
countries for re-export purposes.

According to data from the Directorate General of
International Trade, Indonesia's textile exports to the United
States steadily increased to US$1.24 billion, in 1995, from $1.15
billion in 1994, $1.14 billion in 1993 and $997 million in 1992.

At the same time, Indonesia's total textile exports increased
to $6.20 billion in 1995, from $5.79 billion in 1994, $6.18
billion in 1993 and $6.14 billion in 1992. Textile exports
constitute 14 percent of Indonesia's total export market.

The government has lowered its annual textile export target to
$10 billion per annum by the end of the current Five-Year
Development Plan, from a target of $12 billion, due to slow
textile export growth.

The secretary-general of the Indonesian Textile Association,
Benny Sutrisno, said the slow growth of textile exports is mainly
caused by the current shortage of textile products.

Benny, also present at the conference, suggested Indonesia's
textile producers could double their production capacities to
meet domestic and international demand.

The combined capacity of all textile producers currently
stands at 1.1 million tons per annum, while national annual
consumption steadily increases. Domestic consumption reached 787
tons in 1995, up from 692 tons in 1994.

Benny predicted national textile consumption to reach 900 tons
this year, with the upward trend continuing to increase to up to
one million tons by the year 2000. (06)